Lacey v. BAC Home Loans Servicing, LP (In re Lacey)
480 B.R. 13
Bankr. D. Mass.2012Background
- Debtor Walter W. Lacey filed a Chapter 13 case and commenced an adversary proceeding against multiple loan servicers and trustees arising from a prepetition foreclosure on his Charlestown residence.
- Massachusetts assignments and chain of title are disputed, with multiple transfers of the note and mortgage among FNMA, Wilshire, JP Morgan Chase, BONY, and BONY as Trustee.
- Foreclosure notices and sale occurred in 2010 by BONY as Trustee, following prior foreclosures and changes in loan servicing, despite ongoing attempts by Debtor to modify the loan under HAMP.
- Debtor alleged wrongful foreclosure, improper accounting of amounts due, and misrepresentation of the debt, along with claims under RESPA, FDCPA, and Chapter 93A.
- The court treated the damages theories as contested, analyzed standing to challenge the chain of title, and addressed HAMP-related duties, with partial summary judgment for most defendants and remaining issues reserved.
- The memorandum ultimately recommends partial grant of summary judgment for the Defendants, with BONY as Trustee singled out for potential voidness of the sale and a separate amendment procedure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BONY as Trustee validly foreclosed | Lacey contends the foreclosure was void due to an invalid chain of title at the time of notice and sale. | BONY as Trustee held the mortgage via proper assignments and could foreclose under Mass. law. | Count I mostly granted; BONY as Trustee foreclose not proven; need to amend to include BONY as Trustee for Count I. |
| Promissory estoppel viability against BAC | BAC promised to refrain from foreclosing while HAMP review proceeded, inducing reliance and forborne action. | No enforceable promise to postpone foreclosure; possible lack of reliance and indefinite promises; statute of frauds concerns. | Count II largely denied; BAC case issues remain; Court finds genuine issues as to BAC’s conduct, preserving some relief, but other defendants entitled to judgment. |
| Chapter 93A claim prerequisites | Plaintiff complied with 93A by alleging unfair practices and relied on defendants’ actions. | No written demand as required by 93A §9(3); Plaintiff failed to satisfy prerequisite. | Count III granted for all defendants; lack of written demand defeats 93A claim. |
| RESPA violation and QWR adequacy | February 26, 2010 letter constituted a qualified written request; servicers failed to respond. | Letter did not meet RESPA QWR standards; no damages or statutory damages proven. | Count IV: BAC findings contested; Court finds QWR present and BAC failed to respond; denial of summary judgment as to BAC, with other defendants granted. |
| FDCPA liability exposure | Defendants misrepresented debt amount and engaged in abusive collection practices. | Most defendants not subject to FDCPA as debt collectors; BAC arguable liability for misstatement. | Count V: Summary judgment denied to BAC; other defendants granted; overall FDCPA liability limited to BAC to the extent of misstatement. |
Key Cases Cited
- U.S. Bank Nat’l Ass’n v. Ibanez, 458 Mass. 637 (Mass. 2011) (holds foreclosures require holder authority and proper assignment; strict adherence to notices)
- Bevilacqua v. Rodriguez, 460 Mass. 762 (Mass. 2011) (emphasizes strict compliance in foreclosure proceedings)
- Akar v. Fed. Nat’l Mortg. Ass’n, 843 F. Supp. 2d 154 (D. Mass. 2012) (agency/notice considerations in mortgage foreclosures; chain of title relevance)
- Speleos v. BAC Home Loans Servicing, L.P., 755 F. Supp. 2d 304 (D. Mass. 2010) (HAMP guidelines as evidence of possible negligence; no private 93A right in HAMP itself)
- Dixon v. Wells Fargo Bank, N.A., 798 F. Supp. 2d 336 (D. Mass. 2011) (promissory estoppel damages limited to reliance expenditures; MA law nuances)